Solar power leads the global energy transition as costs plunge to record lows

Solar power leads the global energy transition as costs plunge to record lows

by Sophie Jenkins

London, UK (SPX) Oct 07, 2025

Solar energy has become the world’s most affordable power source, with costs in the sunniest regions now as low as Pounds 0.02 per kilowatt-hour – cheaper than electricity from coal, gas or wind, according to new research by the University of Surrey’s Advanced Technology Institute (ATI).

Published in Energy and Environment Materials, the study identifies solar photovoltaic (PV) systems as the primary engine of the global clean-energy transition. “Even here in the UK, a country that sits 50 degrees north of the equator, solar is the cheapest option for large-scale energy generation,” said Professor Ravi Silva, ATI Director and study co-author. “Globally, installed solar capacity surpassed 1.5 terawatts in 2024 – twice that of 2020 and enough to power hundreds of millions of homes.”

The researchers report that lithium-ion battery costs have fallen by nearly 90% since 2010, making solar-plus-storage configurations competitive with natural gas plants. These hybrid systems allow excess solar power to be stored and released as needed, creating a dispatchable and grid-balancing energy source.

However, integrating vast amounts of solar power into existing grids poses new challenges. “Connecting growing levels of solar power to electricity networks is now one of the biggest challenges,” noted Dr Ehsan Rezaee, ATI co-author. “Smart grids, artificial intelligence forecasting and stronger regional interconnections will be vital to keep power systems stable as renewable energy use rises.”

Professor Silva added that combining storage with smart grid advances has made solar “reliable, affordable and clean at scale.” He emphasized that new materials such as perovskite solar cells could raise energy output by up to 50% without expanding land use. Yet, sustained policy commitment remains essential, with initiatives like the US Inflation Reduction Act, the EU’s REPowerEU plan and India’s Production Linked Incentive scheme demonstrating how coordinated policy can fuel rapid innovation and deployment.

Research Report:Solar Energy in 2025: Global Deployment, Cost Trends, and the Role of Energy Storage in Enabling a Resilient Smart Energy Infrastructure